WHEN Chicago’s Field Museum honoured Kunming’s Southwest Forestry College vice president Yang Yuming on 25 May 2003 for his ‘critical role’ in carrying out a rapid biological inventory of the Nu (Salween) river basin that the museum believes ‘helped convince the authorities to reconsider damming’ the river, it became the latest voice in an urgent anti-dam protest that has involved even Unesco.

The upstream Chinese portion of the Salween could support a 23.3GW 13-dam cascade that would be an important contribution to China’s hydro power resource but it is also, since last year, a Unesco World Heritage site. Despite this, preparatory work for the first dam would have begun this year if Chinese prime minister Wen Jiabao had approved late March a National Development and Reform Commission (NDRC) proposal for the cascade. Instead, he astonished everyone by rejecting it.

Deciding that the entire scheme should be ‘carefully considered’, Wen added: ‘we should make a scientific decision about major hydroelectric projects like this which have aroused a high level of social concern and which the environmental protection side opposes’. Commentators, attaching significance to a written rather than oral decision, believe Wen is making an important policy shift away from more or less automatic water storage development on all Chinese rivers towards his more ‘people-centred’ national development philosophy.

Several emerging complementary factors suggest the country does not need to commit to more hydro just now and may in fact never need much more than is already in the approved pipeline.

The chief factor is that the pipeline is brim full. Table 1, that already excludes the Nu cascade and lists only GW-scale projects, fully 80% of which are in the Western region, shows that 120GW of new capacity could easily be commissioned by 2020. Since it is now certain that at least 100GW of ‘old’ hydro will be in service by 2005, the additional capacity would allow China to surpass its lower 2020 installed hydro power capacity target of 200GW (Table 2) by some 10%.

It would in the process develop its second 100GW of hydro in only 15 years compared to the 55 years required to build the first tranche. China is thus on the cusp of a gigantic hydro power construction boom that seems highly unlikely to be curtailed. The main reason for such expectation is that if the country is to meet highly ambitious long-term development goals that call for sustained high single digit economic growth rates over several decades, it will need all the power it can get. Its present severe national power shortage that is prompting unprecedented widespread criticism of NDRC planning processes and that will likely continue well beyond the official recovery date of 2006 is dramatic proof of this need.

But this, from a planning perspective, is where second thoughts about China’s hydro begin. An important contributor to the present power crisis has been widespread drought that translated into hydro power generation shortfalls in 2003 even as higher than normal summer temperatures encouraged much greater power consumption, particularly for pumped irrigation. The six provinces shown in italics in Table 3 were particularly severely affected, whereas power shortages in the rest of the country typically stem from a combination of coal supply shortages and extraordinarily rapid power demand growth.

Moreover as the NDRC struggles to find a solution to the crisis, hydro power’s long development lead times mean it is no help at all. China’s urgent additional short-term power supply needs must therefore be met mostly from increased gas and nuclear capacity that, once built, limits the longer-term contribution hydro can make.

Future growth

So hydro in China’s present and planned headlong economic growth context is both unreliable and inflexible. Add to these characteristics that its share of total generation has diminished right from the start (Table 2) and that even the gigantic new building programme through to 2020 is unlikely to change this, and it is also increasingly marginal.

Admittedly, total 2020 installed hydro capacity could conceivably reach 250GW on the basis of currently planned projects but even this would probably make little difference. Total projected generation in 2020 is 4300TWh but if this figure is as strongly conservative as present 10th Plan projections are proving to be with regard to present demand, either 200GW will yield significantly less than 15% of total generation or 250GW would yield slightly more. Either way, hydro would appear destined by China’s evolving economic development paradigm for a marginal role.

Significantly, this tends neatly to fit China’s broader water storage strategy. Its widespread use of hydro’s multi-purpose benefits probably accounts for domestic hydro’s disappointing energy yields. The World Energy Council (WEC) uses a yield of around 5TWh/GW to estimate potential generation but as Table 2 shows, China has so far achieved only around 3.2TWh/GW. A core determinant appears to have been priority in reservoir operations to water supply for irrigation, urban use and navigation, the lesson in this respect having been learned from the Yellow river cascade, particularly the pioneering Sanmenxia scheme that was completed against Soviet advice in 1960. Water storage along the river is so complete it typically no longer reaches the sea.

Moreover, China’s focus on its dams’ non-power applications is sure to intensify. Most dramatically, it embarked in December 2002 on a gigantic decades-long water diversion project that will transfer along four routes significant Yangtze basin flows into the Yellow river as well as direct to the heavily water deficit northeast. The first two relatively short western routes will rob the Jinsha of water that would otherwise have fed its 12-dam 59GW cascade (Table 1). The other two routes will take water from the lower Yangtze at the Three Gorges reservoir itself and from just upstream of Shanghai. Consequently, the Yangtze’s enormous hydro resource will soon have to compete with commensurate water supply demands that will include replenishing the downstream Yangtze for navigation of the water withdrawn from Three Gorges.

Unfortunately, such grand macro-management can sometimes go wrong. As one example, West-East energy transfers that include hydro exports to the east are supposed to benefit both regions. But Yunnan’s hydro shortage was due entirely to its having to meet energy export quotas to Guangdong without a commensurate increase in its own domestically adequate available resource.

Senior Beijing-based bureaucrats have pointed out that Yunnan had to double its power exports to Guangdong from 2002 to 2003 to 6.3TWh even though its own hydro capacity increased by only 10%. It therefore suffered a 6TWh domestic energy shortfall that has had severe economic repercussions. Yunnan must this year export 8TWh to Guangdong that without any additional capacity in service will represent a claimed 10TWh energy shortfall for the province. Economic disparity between West and East is therefore at least in this case increasing rather than being diminished.

A second potentially adverse aspect of such management is that, because four-fifths of all new hydro will be built in the Western region and because such activities in the southwest strongly impinge on water supply and hydro throughout Southeast Asia, a strong, increasingly well-organised and influential anti-dam lobby now has the vast bulk of all Chinese water storage projects in its sights. It is moreover being heard at an increasing number of seminars throughout the country including Beijing, has recently through Chiang Mai University’s Unit for Social and Environmental Research (USER) published a detailed assessment of Yunnan activities, and is even winning converts from within the industry. It could even be due to this unintentional focus that the conservationist message is reaching premier Wen.

Energy study

Perhaps the most chilling factor that would affect future Chinese hydro power growth is that strong technical support is emerging for a much smaller available resource than is already planned. If a MARKAL-based 2001 joint Tsinghua-Princeton university study of the various energy technology clusters that would deliver a least-cost environmentally tenable economic development pathway in China up to 2050 is right, hydro’s optimal installed capacity would be just over 100GW.

The study developed two scenarios – a low-technology business-as-usual base case and an advanced technology alternate. Although both scenarios assumed the same moderate GDP growth rates of 7% per year to 2010, 5.5%/yr to 2025 and 4% thereafter, the study’s key finding was that under the base case, ‘China will be unable to achieve its economic development aspirations while simultaneously meeting energy security and local air pollution reduction goals. This is true even if end-use energy efficiency improvements are aggressively pursued and a high level of nuclear electricity enters the economy.’

The advanced case in contrast found ‘plausible strategies that would enable China to continue to meet social and economic development objectives, primarily with clean and renewable energy from domestic sources. Furthermore, it appears there would be essentially no added cost over the long term except when seeking extremely deep reductions in carbon emissions.’

The punch line for hydro, however, is that its share in the power generation sub-sets of both scenarios is minimal. In the base case, ‘hydro power grows until 2010 when 87GW of capacity are in place and remains at that level thereafter as lower cost electricity options become available’. Its generation share (TWh) therefore declines from around 18% in 2010 to 14% by 2020 and smaller shares thereafter. Coal and nuclear meanwhile maintain shares of around 75% and 6% respectively up to 2020 after which coal markedly increases its share.

In the advanced case, ‘hydro power capacity reaches 107GW’ by 2010 for a 23% TWh share but no further capacity is then added. Meanwhile clean (typically gasification-based polygeneration) coal maintains a 50-60% share up to 2025 after which nuclear and the renewables come strongly forward. Hydro thus again progressively loses market share.

From both pragmatic and theoretical perspectives, therefore, Chinese hydro is becoming increasingly marginal. So much so that present plans that expect to commission around 200GW by 2020 strongly breach admittedly conservatively-based least cost energy development pathways. This could be justified as providing least-cost balance to nuclear in an aggressive economic growth environment as in both scenarios nuclear energy is hydro power’s chief competitor. But all energy-based arguments for more than 200GW of hydro after 2020 look increasingly flimsy.
Additional capacity after this date would therefore be driven by storage needs to support urban and rural water supply. But as these demands will by then be largely met by current projects there would appear to be little need for additional large-scale water storage after 2020. Hence in terms of both power and non-power planning, it would seem that hydro’s bonanza is just about over even though construction-wise it is just beginning. Key determinants on the power side will be the pace of nuclear power development as well as that of clean coal research.

Yet another indication of waning prospects for China’s domestic hydro was the 5 May announcement that Heilongjiang province in the far northeast has started importing Russian hydro power. Heihe City will buy 0.4TWh from the Russian Far East (RFE) this year, 0.5TWh in 2005, rising to 1 and 1.5TWh in 2006 and 2007, respectively. By contract end in 2013 China will have imported 15.4TWh of Russian hydro power, roughly equivalent to two years supply from Yunnan to Guangdong.

So Chinese premier Wen Jiabao sits in Beijing with his finger on the pulse of China’s evolving economic development paradigm. For him, hydro is already peripheral even as its construction boom is just beginning. So when the state machinery proposes yet more hydro that in the Nu cascade’s case happens to be particularly contentious the decision to reject it is easily made. More such decisions look likely, especially if the proposed scheme has little non-power benefit and, as is increasingly likely, the anti-dam movement has it in its sights.


Table 1
Table 2
Table 3